U-T OFFERS TWIST ON REWARDS PROGRAM

Businesses to get analytics and ad package upfront

U-T San Diego has launched a new merchant loyalty program, aimed at providing local businesses with a battery of advertising they will pay for only if it brings them customers.

Analysts say U-T Rewards has some good things going for it, but it faces stiff competition in the crowded loyalty rewards marketplace.

Although a number of its features already exist in other programs covering every industry from airlines to restaurants, this program has a unique and robust mix, said U-T San Diego Vice President Interactive Dan Hellbusch.

Consumers don’t have to hang another fob on their key chains, print out coupons or load discounts to their phones. And with one account, they are automatically enrolled in what are essentially individual reward programs for hundreds of merchants.

Participating merchants, many of whom could not before afford print, online, TV and email advertising, will now get it, along with analytics on their customers, and they don’t pay for it until a U-T Rewards member makes a purchase. Businesses pay U-T San Diego a percentage of each transaction completed through the program.

U-T San Diego in return gets better feedback on the effectiveness of its advertising efforts.

Unlike other so-called “horizontal” loyalty programs that give members rewards and cash to use with any merchant within a defined network, U-T Rewards cash can only be spent at the business and location where it was earned.

“It’s a real benefit for all our merchants on the program so they can build their customer base instead of funding them to go someplace else,” Hellbusch said.

U-T San Diego has already partnered with more than 300 merchants throughout San Diego County, ranging from restaurants to auto repair shops, to offer U-T Rewards members at least 10 percent cash back on every transaction.

Anyone can sign up to be a member of U-T Rewards (U-T San Diego and U-T Daily Deals subscribers are auto-enrolled in the program, but can opt out) by registering the credit or debit card they use most frequently in everyday transactions. It’s free.

Participants’ cash rewards are printed on their receipts and automatically deducted from their next purchase at that business and location.

Analysts said U-T San Diego is making interesting tweaks to existing technology, while also taking on the advertising risk.

Newspapers across the country in recent years have launched loyalty programs, but most, like the Los Angeles Times’ now-defunct SCORE Program, have followed a gamelike design in which readers earned points for doing things like reading and sharing stories. Most of those have failed because they tried to change consumer habits without providing significant benefits to anyone, said advertising analyst Gordon Borrell.

“I really laud the Union-Tribune for doing this,” said Borrell. “The advertising landscape has become so phenomenally crowded that newspapers have had to prove the efficacy of what they do, and have also needed to get more involved in the marketing part of the business.”

U-T Rewards will have to prove its value to merchants quickly, said Miro Copic, professor of marketing at San Diego State University. The analytics will give them the tools to do that.

“All of these merchants are becoming more educated and are appreciating the analytics, but will tell really quickly whether or not the program is relevant to them,” he said.

Hellbusch said the goal is to help members find new merchants and get cash back for doing business with them, and to expand the news organization’s reach. For merchants, the U-T wants to help them get new clients, retain clients and make more money, he said.

“We want to connect with as many San Diegans as possible,” he said. “Not everyone in San Diego reads our site or our newspaper. So it’s extending what U-T San Diego is in the community from beyond just a newspaper or news organization to really a center of San Diego, if you will.”